Balancer Labs released a proposal to improve liquidity, or will issue a governance token BAL

According to beats BlockBeats, Balancer Labs, an unmanaged portfolio management service, released a blog today proposing to launch a community governance token BAL, hoping to improve the liquidity of the community through the governance token.

About governance tokens

The total supply of BAL tokens will be 100 million.

25 million BAL tokens were allocated to the founding team, core development, consultants and investors.

75 million BAL tokens will be distributed to liquidity providers over the next few years.In the future, as more governance is approved, tokens may also be distributed to strategic partners to facilitate the development of the agreement and its ecosystem.

The proposed allocation of BALs to liquidity providers is 145,000 per week, or about 7.5 million per year. This means that in the first year of BAL's launch, the supply of 25 million tokens initially allocated will have ballooned by 30%.

Initial price: the initial price of BAL tokens is $0.60.

This makes the current maximum market value of governance tokens in Balancer $60 million. At the time of this writing, it is estimated that the supply in the first year will be 32.5 million BAL, or $19.5 million. It's worth noting that while first-year allocations are relatively constant, Balancer says that future allocations will ultimately be determined by BAL holders.

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So if the proposal passes and is issued as planned, this would put BAL in the top 10 of DeFi's market cap at full dilution of supply, which suggests that the industry's growing asset management DEX has room to grow if the deal does generate volume (and fees) as expected.

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How to get BAL

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All liquidity providers will receive a BAL as long as the user's flow pool on CoinGecko can display the dollar value of at least two tokens. It's worth noting that,

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Thinking about managing tokens

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With the release of UMA governance tokens, the COMP and the upcoming governance migration of Aave. One community member noted that it was interesting to consider how governance tokens should be properly valued. Especially with a new framework like SAFG, which allows users to obtain governance tokens with no economic value (currently), it would be interesting to consider the level of demand for their local tokens from these protocols.

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With the upcoming release of Uniswap V2, we would be interested to consider whether the idea of earning local tokens to provide liquidity would outweigh the idea of charging protocol fees directly.

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One thing is certain, however, that DeFi is slowly reducing its barriers to liquidity, particularly its ability to provide capital in the form of an asset, rather than having to split it in two (as Uniswap now does). While it is unclear who will benefit most from the new liquidity, we can only assume that DeFi products will benefit from deeper, unlicensed liquidity in the coming years.

The original address: https://medium.com/balancer-protocol/proposing-balancer-liquidity-mining-cab4503972fa

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